Good news for small-business owners who are new on the scene or who have been putting off buying insurance for price-related reasons: commercial insurance rates continue to fall. Insurance Journal reports on a survey by the Council of Insurance Agents & Brokers that shows prices dropped an average of 3.1 percent during the third quarter. Sure, that's not a staggering drop, but when every penny counts, the savings – however slight – add up.
The survey found the policies with the most declining rates were…
- Business Interruption Insurance.
- Commercial Property Insurance.
- General Liability Insurance.
- Umbrella Insurance.
- Workers' Compensation Insurance.
In short, if you've been on the fence about buying small business insurance, it's time to get moving. The buyers' market means carriers are competing for your account, and you may be surprised how affordable your coverage can be.
How Much Is Small Business Insurance, Anyway?
First, let's establish that the cost of business insurance is based on a medley of variables. Rates depend on where you buy your insurance, what your insurance covers, and what your risks are.
We compiled reports that give you a ballpark idea of possible rates based on what our small-business clients spent on coverage last year. Check out the full 2014 Business Insurance Cost Analysis for an overview, or scope out the following policy pricing reports:
- General Liability Insurance Cost Analysis.
- Professional Liability Insurance Cost Analysis.
- Umbrella Insurance Cost Analysis.
- Workers' Compensation Insurance Cost Analysis.
Remember, the only way to get a real-time rate for your business insurance is to apply for a quote.
The Case to Get Insured Now, Not Later
Aside from the fact that insurance prices have been steadily declining over the year, there's another huge incentive to finally pull the trigger on your insurance purchase: if you already have a claim on your hands, it's too late for coverage.
We get it – even low prices can seem like a steep expenditure when you're working on a shoestring budget. But if things are tight right now, just imagine how impossible it's going to be to replace lost or damaged business equipment entirely out of pocket. Or worse – how would you handle legal fees if you ever got sued?
While it's tempting to assuage these worries by convincing yourself lawsuits are only a problem for big companies, the facts tell another story. So long as you sell goods or services and interact with the public, you are as open to lawsuits as the rest of the business world.
With that in mind, here are three additional ways you may be able to save money on your small business insurance:
- Bundle your policies. A Business Owner's Policy bundles together General Liability and Property Insurance at a reduced rate. You may qualify for a BOP if you run a small business in a low-risk industry.
- Ask your agent about risk-management discounts. Some carriers offer premium reductions when you manage your risks. For example, some providers may reduce your Property Insurance rate if you install a security system.
- Use client contracts. While you may have to enlist an attorney's help to create boilerplate contracts, the upfront investment may be invaluable later on when a dispute crops up. Your contracts may curb lawsuits, which is why insurance carriers tend to favor businesses that use them.
For more ideas on how to cut down on insurance spending, check out our insurance savings blog series.